Applied Digital Fiscal Q1 Revenue Rises 322% to $341.9M

Applied Digital reported revenue of $341.9 million for its fiscal first quarter 2027, ended 31 August 2026, up 322% from the prior-year period, in results released on 7 October 2026. Net loss from continuing operations attributable to common stockholders was $221.0 million, or $0.76 per share, according to the release.

The largest single line was tenant fit-out services: the HPC Hosting business booked $183.5 million of them, against $65.8 million of base rent, the release says. On our arithmetic, fit-out services were about 54% of total revenue and base rent about 19%.

Where the Revenue Came From

The release puts HPC Hosting revenue at $262.6 million: $65.8 million of base rent, $183.5 million of tenant fit-out services and $13.3 million of tenant recoveries, for $33.4 million of segment operating profit.

The Data Center Hosting business, which the release says provides energized space to crypto mining customers, generated $37.8 million, against $37.9 million a year earlier, and $13.3 million of segment operating profit.

Adjusted revenue, a non-GAAP measure that excludes ChronoScale, the majority-owned accelerated-compute platform, was $300.4 million, against $64.2 million a year earlier. On our arithmetic, that leaves about $41.5 million of revenue from ChronoScale. The release says services revenue included $23.0 million in GPU hardware sales related to ChronoScale.

Data center rental revenue has no year-earlier comparison: the release says the HPC Hosting business commenced rental operations in the second quarter of fiscal 2026.

Why the Loss Widened

Net loss from continuing operations attributable to common stockholders was $221.0 million, against $18.5 million in the fiscal first quarter of 2026, according to the release.

The release itemises the changes. Selling, general and administrative expenses were $114.7 million, against $29.5 million, including an increase of $51.7 million in stock-based compensation. Interest expense rose to $77.4 million from $8.0 million, while interest income rose to $35.8 million from $0.9 million.

The release also reports a $49.5 million loss on the change in fair value of derivatives, mainly from a $56.1 million fall in the value of its Babcock & Wilcox warrant. It adds an $11.4 million loss on its Babcock & Wilcox shares. Separately from the continuing-operations figure, the release reports a $16.1 million net loss from discontinued operations tied to the Ekso business at ChronoScale, which brings total net loss attributable to common stockholders to $237.1 million, or $0.82 per share.

On the company’s non-GAAP measures, adjusted net loss was $4.1 million, or $0.01 per diluted share, and adjusted EBITDA was $64.4 million, against $0.5 million a year earlier. At 31 August 2026 the company reported $3.7 billion in cash, cash equivalents and restricted cash, and $6.4 billion in debt.

Leases and Capacity

As of 31 August 2026, the release says, Applied Digital has leases for approximately 1.41 GW of critical IT load across five campuses, representing approximately $36 billion of contracted revenue over their initial base terms, or approximately $86 billion if all renewal options are exercised.

Polaris Forge 1 is leased to CoreWeave, Polaris Forge 2 to an investment-grade hyperscaler, and Delta Forge 1, Polaris Forge 3 and Delta Forge 2 to a tier-one investment-grade hyperscaler, according to the release. It lists the 210 MW, 15-year Delta Forge 2 lease, announced on 8 June 2026, at approximately $5.2 billion of base-term contracted revenue.

The second 75 MW phase of Building 2 at Polaris Forge 1 was ready for service on 1 October 2026, bringing live capacity at the campus to 250 MW, the release says. The company says it expects delivered critical IT load across its North Dakota campuses to reach 300 MW by the end of calendar 2026.

During the quarter it closed $1.59 billion of 7.000% senior secured notes due 2031 to fund the third 150 MW building at Polaris Forge 1 and to repay a $300 million bridge facility.

Power, Finland and ChronoScale

After the quarter, the release says, the company secured up to approximately 1 GW of potential power capacity in Finland and entered a power purchase agreement with Base Electron for capacity and energy from an approximately 1,200 MW gas-fired plant to be developed in North Dakota. It says it holds an approximately 10% equity interest in Base Electron.

“Power remains the gating factor for AI infrastructure,” the release says. Chief executive Wes Cummins said: “Put simply, we view every new restriction elsewhere as making what we already own harder to replicate.”

ChronoScale, in which Applied Digital says it owns approximately 96%, announced plans with Microsoft for a 50 MW AI compute deployment in North America featuring NVIDIA GB300 NVL72 systems.

The Structural Read

The contracted figure is far larger than the quarter. The release puts leases at approximately $36 billion of contracted revenue over their initial base terms, against $65.8 million of base rent this quarter.

The GAAP loss and the adjusted figures diverge. Net loss from continuing operations attributable to common stockholders was $221.0 million, while adjusted net loss was $4.1 million. The release’s reconciliation starts from a $168.0 million net loss from continuing operations and adds back items including $59.4 million of stock-based compensation and the $49.5 million and $11.4 million fair-value losses.

Power is where the release spends its words. It reports a power purchase agreement with Base Electron, an approximately 10% stake in that producer, and up to approximately 1 GW of potential power capacity in Finland.

Three Implications

FIT-OUT LEADS REVENUE Tenant fit-out services were $183.5 million of $341.9 million, about 54% on our arithmetic.

RENT IS STARTING Base rent was $65.8 million, with 250 MW live at Polaris Forge 1 from 1 October 2026, the release says.

A LARGE CONTRACTED BOOK Leases for approximately 1.41 GW represent approximately $36 billion over initial base terms, per the release.

The Business Engineer Lens

This story maps onto the Business Engineer framework The State of AI Data Centers.

The framework’s starting point: “The structural bottleneck isn’t computing, it’s electrons.”

As we read it, Applied Digital’s release makes the same argument from the developer’s side: it calls power the gating factor for AI infrastructure, and the deals it lists after the quarter, the Base Electron agreement and the Finland capacity, are about securing power rather than chips. The $65.8 million of base rent comes from halls already live at Polaris Forge 1.

What Is Not Established

We read Applied Digital’s earnings release in full, including its tables; we did not listen to the conference call. The release does not split the $36 billion of contracted revenue by tenant or by year, and gives no revenue guidance. Non-GAAP figures are the company’s own measures. We did not contact Applied Digital.

The Bottom Line

Applied Digital reported fiscal first-quarter revenue of $341.9 million, up 322%, of which $183.5 million was tenant fit-out services and $65.8 million base rent, and a net loss from continuing operations attributable to common stockholders of $221.0 million.

It reports leases for approximately 1.41 GW, representing approximately $36 billion of contracted revenue over their initial base terms.